Strategy Raises $1.44 Billion to Combat ‘FUD’ During Bitcoin Downcycle: CEO Insights

Phong Le, the CEO of Strategy, announced that the company successfully raised $1.44 billion through a stock sale to mitigate investor fears related to its financial stability amidst a Bitcoin downturn. This initiative aims to strengthen confidence in the company and its ability to meet dividend obligations.

Key Takeaways

Strategy raised $1.44 billion to address investor concerns amid a Bitcoin slump.
The reserve is designed to cover at least 12 months of dividends, with plans to extend to 24 months.
CEO Phong Le emphasized that the firm is well-positioned to service its debts without selling Bitcoin.
A new "BTC Credit" dashboard was launched, indicating the company has sufficient assets to cover dividends for over 70 years.
The move counters market fears, allowing the company to demonstrate its resilience even during challenging market conditions.

Strategy raised $1.44B to dispel ‘FUD’ amid a Bitcoin down cycle: CEO

Main Content

Strategy CEO Phong Le explained that part of the motivation behind establishing a $1.44 billion USD reserve is to ease investor worries about the company’s financial health during a downturn in Bitcoin prices.

Le stated, “We’re very much a part of the crypto ecosystem and Bitcoin ecosystem. That’s why we decided a couple of weeks ago to start raising capital and adding US dollars to our balance sheet to eliminate this FUD,” referring to Fear, Uncertainty, and Doubt, during his appearance on CNBC’s Power Lunch.

On Monday, Strategy announced the creation of the $1.44 billion reserve, which was funded through a stock sale. This reserve is intended to ensure they can cover at least 12 months of dividend payments and will eventually increase to support 24 months, as confirmed by the company.

This capital raise comes amidst worries about whether Strategy could continue to meet its debt and dividend obligations if its stock price drops significantly. “And it’s really this FUD,” Le reiterated on Friday.

“We weren’t going to have an issue paying our dividends, and we were unlikely to have to sell our Bitcoin, but… there was FUD out there suggesting we wouldn’t be able to meet our dividend obligations, which led some investors to bet against Bitcoin,” he mentioned.

Le highlighted, “In just eight and a half days, we raised $1.44 billion—equivalent to 21 months of dividend obligations. We did this firstly to address the FUD, and secondly to demonstrate that we can still raise capital during a Bitcoin downcycle.”

Just last week, Le pointed out that Strategy would only consider selling Bitcoin if its stock fell below the net asset value and the company could no longer access new capital. Additionally, the firm launched a "BTC Credit" dashboard, claiming it currently possesses enough assets to cover dividends for over 70 years.

Related: Cantor slashes Strategy’s target by 60%, tells clients fears of forced sales are exaggerated.

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